The Wet Seal, Inc. Announces Fiscal 2003 Second Quarter Results.Business Editors/Retail Writers FOOTHILL RANCH ranch, large farm devoted chiefly to raising and breeding cattle, horses, sheep, and goats. The cattle ranch was introduced from Latin America to Texas and the plains of the W United States and Canada. , Calif.--(BUSINESS WIRE)--Aug. 21, 2003 Specialty retailer The Wet Seal Wet Seal is a young women's clothing retailer headquartered in Foothill Ranch, California. It carries moderately priced brand name and company-designed apparel and accessories. The company was founded in Newport Beach, California by Lorne Huycke in 1962 as "Lorne's. , Inc. (Nasdaq:WTSLA) today reported a net loss of $0.45 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the second quarter ended August 2, 2003. This compares with net earnings of $0.12 per diluted share for the second quarter last year. For the six-month period, the company posted a net loss of $0.74 per diluted share, versus net income of $0.39 per diluted share for the corresponding prior year period. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the second quarter totaled $126.0 million, compared with $146.2 million for the second quarter a year ago. For the first half of the year, net sales totaled $249.7 million, compared with $302.8 million for the first six months of fiscal 2002. Comparable store sales declined 19.8 percent in the current second quarter and 22.8 percent for the six-month period. This compares with a comparable store sales increase of 1.6 percent for the second quarter a year ago and a 4.9 percent increase in comparable store sales for the first six months of last fiscal year. "During the second quarter, we were pleased to report sequential One after the other in some consecutive order such as by name or number. month-over-month improvement in sales trends," said Walter Wal·ter , Bruno 1876-1962. German conductor noted for his interpretations of Mozart and Mahler. Noun 1. Walter - German conductor (1876-1962) Bruno Walter Parks, executive vice president and chief administrative officer A chief administrative officer (CAO) is responsible for administrative management of private, public or governmental corporations. The CAO is one of the highest ranking members of an organization, managing daily operations and usually reporting directly to the chief executive . "We also continue to focus on streamlining operations and capturing additional savings to bring our cost structure more in line with current sales. Clearly, we are in a rebuilding phase and look forward to a recovery as we pursue our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth objectives under the stewardship stewardship the occupation of being a steward or custodian. Referring to animals it implies the caring sort of relationship based on an acceptance of the need to include the rights of animals in overall plans to maintain financial viability. of our new chief executive." As previously reported, Peter D. Whitford Whitford may refer to:
American animator, showman, and film producer. Noted for his creation of the cartoon characters Mickey Mouse and Donald Duck, he produced the first animated film with sound, Stores executive, joined the company in late June June: see month. as chief executive officer. The company also made a number of senior executive appointments yesterday, aimed at improving the performance of its Wet Seal stores and strengthening its internal systems and planning departments. Gross profit as a percentage of sales was 14.5 percent for the quarter and 17.2 percent for the six-month period. This compares with 30.3 percent and 32.0 percent, respectively, for the second quarter and six-month period a year ago. Almost half of the 15.8 percent decrease in the gross margin for the quarter, stems from lower sales over which to leverage occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy and buying costs. The remaining 7.8 percent is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to greater markdown Markdown The difference between the highest current bid price among broker-dealers in the market and the lower price that a dealer charges a customer. Notes: The broker offers a lower price to try stimulate trading in hopes that they will make the money back on the extra activity and a slightly lower initial markup (text) markup - In computerised document preparation, a method of adding information to the text indicating the logical components of a document, or instructions for layout of the text on the page or other information which can be interpreted by some automatic system. . Selling, general and administrative (SG&A) expenses of $39.4 million in the second quarter were roughly flat with SG&A of $39.3 million in the prior year period, reflecting more effective management of payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. costs on a per store basis, a reduction in advertising expenditures and greater efficiencies in the company's Distribution Center, which included a 9 percent drop in the freight cost per unit. For the six-month period, SG&A expenses totaled $77.6 million, compared with $78.9 million for the first half of fiscal 2002. At August 2, 2003, the company had cash and investments of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $90 million and no debt. At the end of the quarter, inventory at cost totaled $48.7 million. Capital expenditures for the six-month period were $11.0 million, reflecting costs associated with 26 new store openings and 17 store remodels during the first half of the year. This compares with capital expenditures of $29.5 million for the first half of last fiscal year which included the opening of 30 new stores and various upgrades and remodels. The company believes that total capital expenditures for the current fiscal year will be less than $15 million. During the second quarter, the company opened 4 Wet Seal stores and 2 Arden Ar·den An unincorporated city of north-central California, a residential suburb of Sacramento. Population: 101,400. Arden, Elizabeth 1884?-1966. B. stores, bringing the total number of stores in operation at the end of the quarter to 622, versus 588 a year ago. The company closed 4 Wet Seal/Contempo stores and 1 Arden B. store during the quarter. To date, the company has repurchased nearly 1,072,000 shares since the share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program was authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: by the board of directors in October October: see month. 2002. Parks added, "Following the close of the second quarter, we have seen modest improvement in comparable store sales. Although it is still very early in the third quarter, if the current sales trend continues through to quarter's end, we would expect a net loss for the third quarter of between $0.22 and $0.26 per share, with gross margins as a percentage of sales to be in the range of 20 percent to 24 percent and SG&A expense to be similar to, or below, last year's third quarter." The company will host a conference call at 9:00 a.m. Pacific Time today to further review these results. To listen to the call, please dial (800) 310-6649 and provide ID# 197593. A replay of the call will be available through August 28, 2003. To access the replay, please call (888) 203-1112 and provide the ID number above. Any questions regarding the conference call should be directed to the company's investor relations Investor relations The process by which the corporation communicates with its investors. department at (949) 699-4007. Headquartered in Foothill Ranch, California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , The Wet Seal, Inc. is a leading specialty retailer of fashionable and contemporary apparel and accessory accessory, in criminal law, a person who, though not present at the commission of a crime, becomes a participator in the crime either before or after the fact of commission. items. The company currently operates a total of 622 stores in 47 states, the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. , including 488 Wet Seal stores, 103 Arden B. stores and 31 Zutopia stores. The company's products can also be purchased online at www.wetseal.com or www.ardenb.com. For more company information, visit www.wetsealinc.com. SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and OF 1995: This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements that relate to the Company's opening and closing of stores, profitability and growth, demand for its products or any other statements that relate to the intent, belief, plans or expectations of the Company or its management. All forward-looking statements made by the Company involve material risks and uncertainties and are subject to change based on factors beyond the Company's control. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in any such forward-looking statements. Such factors include, but are not limited to, those described in the Company's filings with the Securities and Exchange Commission. This news release contains results reflecting partial year data and non-fiscal data that may not be indicative indicative: see mood. of results for similar future periods or for the full year. The Company will not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.
THE WET SEAL, INC.
SUMMARY STATEMENT OF OPERATIONS
(000'S OMITTED, EXCEPT SHARE DATA)
(UNAUDITED)
Quarter Ended Six Months Ended
August 2, August 3, August 2, August 3,
2003 2002 2003 2002
Net Sales $126,039 $146,158 $249,654 $302,778
Gross Margin 18,297 44,235 43,022 96,779
S,G&A expense 39,379 39,272 77,602 78,864
Operating income
(loss) (21,082) 4,963 (34,580) 17,915
Interest income 424 903 825 1,903
Income (loss) before
taxes (20,658) 5,866 (33,755) 19,818
Provision for income
taxes (benefit) (7,230) 2,200 (11,814) 7,432
Net income (loss) $(13,428) $3,666 $(21,941) $12,386
Net income (loss) per
share, basic $(0.45) $0.12 $(0.74) $0.41
Net income (loss) per
share, diluted $(0.45) $0.12 $(0.74) $0.39
Weighted average
shares
outstanding, basic 29,608,362 30,351,080 29,591,762 30,236,446
Weighted average
shares
outstanding, diluted 29,608,362 31,691,653 29,591,762 31,648,146
THE WET SEAL, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
August 2, February 1,
2003 2003
ASSETS
Cash and cash equivalents $18,535 $21,969
Short-term investments 48,484 39,237
Income tax receivable 15,638 11,561
Merchandise inventory 48,738 31,967
Other current assets 9,067 18,370
Total current assets 140,462 123,104
Property and equipment, net 108,143 109,781
Long-term investments 22,924 33,639
Goodwill, net 6,323 6,323
Other assets 11,611 11,778
Total assets $289,463 $284,625
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable $12,213 $13,827
Accounts payable -- merchandise 49,799 22,248
Accrued liabilities 22,630 22,520
Total current liabilities 84,642 58,595
Deferred rent 9,657 9,315
Other long-term liabilities 5,606 5,392
Total long-term liabilities 15,263 14,707
Total stockholders' equity 189,558 211,323
Total liabilities and stockholders' equity $289,463 $284,625
Note -- Certain reclassifications have been made to the prior year
financial statements to conform with the fiscal 2003 presentation.
THE WET SEAL, INC.
SELECTED DATA
(UNAUDITED, IN THOUSANDS)
Six Months Ended
August 2, August 3,
2003 2002
Capital Expenditures
First Quarter $8,836 $20,680
Second Quarter 2,162 8,823
Year-to-date $10,998 $29,503
Depreciation & Amortization
First Quarter $6,695 $5,172
Second Quarter 6,645 5,130
Year-to-date $13,340 $10,302
Interest (Income) Expense -- Net
First Quarter $401 $1,000
Second Quarter 424 903
Year-to-date $825 $1,903
THE WET SEAL, INC.
STORE OPERATING DATA
(UNAUDITED, IN THOUSANDS)
Six Months Ended
August 2, 2003 August 3, 2002
The Wet Seal, Inc. Store Count
Beginning of quarter 621 579
Opened 6 16
Closed (5) (7)
Quarter-to-date 622 588
Beginning of year 606 571
Opened 26 30
Closed (10) (13)
Year-to-date 622 588
THE WET SEAL, INC.
STORE OPERATING DATA
(UNAUDITED, IN THOUSANDS)
Six Months Ended
August 2, August 3,
2003 2002
Wet Seal/Contempo Casuals Store Count
Beginning of quarter 488 460
Opened 4 11
Closed (4) (4)
Quarter-to-date 488 467
Beginning of year 476 457
Opened 20 20
Closed (8) (10)
Year-to-date 488 467
Six Months Ended
August 2, August 3,
2003 2002
Arden B Store Count
Beginning of quarter 102 87
Opened 2 4
Closed (1) (1)
Quarter-to-date 103 90
Beginning of year 100 84
Opened 5 7
Closed (2) (1)
Year-to-date 103 90
Six Months Ended
August 2, August 3,
2003 2002
Zutopia Store Count
Beginning of quarter 31 32
Opened -- 1
Closed -- (2)
Quarter-to-date 31 31
Beginning of year 30 30
Opened 1 3
Closed -- (2)
Year-to-date 31 31
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion